ES Daily Plan | December 16, 2024

My preparations and expectations for the upcoming session.

Dec 15, 2024

For new followers: The yellow levels highlighted at the bottom left of the chart are the primary levels that I focus on intraday. My strategy for preventing impulsive decisions at unfavorable locations involves following a simple yet effective rule of exercising caution when initiating trades outside of the yellow levels. This implies that I am cautious chasing longs above the final yellow upside target and shorts below the final yellow downside target. It is crucial to understand that refraining from chasing a trade is not an automatic invitation to initiate a trade in the opposite direction.

Visual Representation

Contextual Analysis

As mentioned in the Weekly Plan, starting tomorrow, I will transition to the ESH25 (March) contract. For reference, I do not back-adjust my charts. On the chart, I've marked the settlements from Friday's session for both ESZ24 (December) at 6055.50 and ESH25 (March) at 6125.75, reflecting a +70.25 point difference. I recommend marking 6055.50 on your chart, as roll gaps often tend to get filled. The levels for tomorrow’s are based on Friday's session for the ESH25 (March) contract.

Contract rollovers can often lead to confusion. While some traders choose to back-adjust their charts, I prefer to leave historical levels unchanged, resulting in a visible roll gap on the chart. Regardless of your approach, my daily levels of interest remain the same.

With a lineup of key events this week, including Retail Sales, FOMC, Initial Jobless Claims, GDP, and PCE, plus the added complexities of contract rollover and OPEX, it's best to avoid bold market predictions and instead stick to a day-by-day approach, which is my usual approach anyway.

In terms of levels, the Smashlevel is at 6132, marking Friday’s initial balance low (ESH25). Holding below this level would target 6111, with a final target at 6090 under sustained selling pressure. Failure to hold below 6132 would target Friday’s opening level at 6145 (ESH25), with a final target at the resistance area between 6165 and 6175 under sustained buying pressure.

Levels of Interest

Going into tomorrow's session, I will closely observe the behavior around 6132.

Break and hold above 6132 would target 6145 / 6165 / 6175
Holding below 6132 would target 6111 / 6090

Additionally, pay attention to the following VIX levels: 14.54 and 13.06. These levels can provide confirmation of strength or weakness.

Break and hold above 6175 with VIX below 13.06 would confirm strength.
Break and hold below 6090 with VIX above 14.54 would confirm weakness.

Overall, it's important to exercise caution when trading outside of the highlighted yellow levels. A non-cooperative VIX may suggest possible reversals i.e trade setups.